The Twitterverse is atwitter with news bits about the coming meeting this Friday and Saturday. There are rumors that Putin and Trump were going to meet but now the get-together is off. The once-scorned Peter Navarro is to be at the Xi/Trump summit after all. An Argentinian Judge has suggested that Saudi Crown Prince MBS may be arrested for the killing of Jamal Khashoggi. There will be no agreement on free trade in the G-20 communique, especially as Trump has renewed threats against German auto firms with a 25 percent tariff on its exports to the United States. When Donald Trump comes to town it truly portends a three-ring circus.

1. The Trump/Xi summit has the world’s attention for the markets are fixated on a hoped for diminution in trade tensions between the world’s two largest economies. MY CONJECTURE is that you will hear of the U.S. backing off from the next rate increase to 25 percent as China promises to allow more foreign investment into certain sensitive sectors while asking for more time to curtail the theft of intellectual property. President Xi has hoped to rally support from Europe and Japan in an effort to isolate the U.S. on the issue of tariffs. However, on Thursday, there was a Financial Times article titled, “UK and Germany Wary of Huawei As US Turns Up Pressure,” which shows that Europe is very concerned about Chinese cyber espionage. The Chinese telecom giant Huawei is being blocked from the potential to roll out its G5 network for fear of embedded cyber attack software in its products.

Xi is going to have to abide by the wisdom of Deng Xiaoping “to lie low” and not provoke. Well, it is too late to lie low but a compromise on some issues critical to President will imply less provocation. The problem for markets is will trump ask for too much if he senses that Xi is too compliant? The best indicator will be the Chinese yuan. If it weakens dramatically because of a perceived summit failure many asset classes will sold. A very weak YUAN will initiate fears about an onset of disinflation as China moves to dump goods all over the globe in an effort to prevent a further slowdown in its economy. It is interesting that Peter Navarro has been reinvited to the summit, providing a hint that the discussions will be very contentious. If Navarro is at the meeting IT OUGHT TO PROVOKE Larry Kudlow’s resignation.

2. The Russian situation needs to be closely watched as the on-again, off-again Trump-Putin summit is off in response to this week’s action by the Russians in seizing three Ukranian ships. It is a typical ploy of President Putin to initiate conflict when the world stage provides a dramatic backdrop. (First the invasion of Georgia 2008 during the summer Olympics; then the seizure of Crimea during the Russian Winter Olympics in Sochi; and now the G-20 meeting in Argentina with US/China being the focal point.)

Did Russia seize the ships as a negotiating ploy in order to be seen as lessening tensions by offering a negotiation. This week Putin gave an interview in which he repeatedly stressed that the U.S. sanctions are a continuing concern to the Russians and are seeking  ways of diminishing the economic impact. The idea that NATO would send ships to the Ukranian defense is preposterous for to paraphrase Bismarck. It is not worth the bones of a single special forces soldier of the U.S. But watch closely to see if Putin raises the stakes of a diminishing supply of energy to Europe as winter sets in over its Northern parts.

The Russians can also play upon the Saudis for the world’s largest oil exporter owes a large debt to the Russians for having bailed them out in Syria against the Iranians. It was a little over a year ago when the Saudi King made a historic visit to Moscow. The low for the next year in crude oil was made on October 6 at $49.10. Now that we were back to that level this morning it is important to watch for a possible Russian /Saudi deal on oil. Trump is not the only world leader that the Saudi monarchy owes favors.

Also, I know that the death of Jamal Khashoggi is deemed an important event for he is considered a “journalist” for the Washington Post. This Saudi citizen was involved in political intrigue for several decades and was under the protection of his notorious relative, Adnan Khashoggi, the world’s largest arms dealer. Many years ago Jamal was thought by many to be a CIA operative and played all sides against each other.

In addition, Saudi Arabia is a monarchy, which is defined by the King being the law. Saudi Arabia is not a constitutional monarchy, the KING is the law. This KINGDOM still maintains mass public executions. It is sad for his loved ones but should not be an event that plays upon international diplomacy. (I suggest you google him and learn about the character in question). Any global denigration of Prince Mohammad Bin Salman (MBS) will result in a tighter alliance between Russia and the Saudi Monarchy.

3. Pay attention to the rise of trade tensions between the U.S. and Europe, especially Germany. The German DAX index has been struggling to rally even as it experiences negative nominal yields with an annual 2.2% rise in its harmonized CPI released today. Where is a German investor supposed to invest to protect their savings? In the U.S., investors bought stocks in response to Bernanke’s QE program but in Germany the DAX is down more than 10 percent on the year.

There are fears that President Trump is desirous of placing a 25 percent tariff on German cars exported to the U.S. It was at the last G-7 meeting where Chancellor Merkel embarrassed President Trump in that picture as she glowered at him across the table. Chancellor, beware of the outrage of a narcissist SCORNED. Now that Angela Merkel is politically very weak, look for Trump to respond by pushing hard for Germany to correct its massive current account and trade surpluses.

There will be plenty of support for Trump from other European nations that would be in favor of Germany embarking upon a massive program of fiscal stimulus. The major outcome would be if Germany rallied to support a G-20 initiative to improve global infrastructure. Again, the circus is in town and there are many balls in the air. The tigers are roaring. The tightrope walkers are trying to balance and the cameras are focused on the ringmaster in the center ring? Would you prefer popcorn or edamame?